SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
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the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
CBL & ASSOCIATES PROPERTIES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
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[Letterhead of CBL & Associates Properties, Inc.]
One Park Place
6148 Lee Highway, Suite 300
Chattanooga, Tn 37421-6511
Phone 423 855-0001
Fax 423 490-8662
March 29, 2001
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders
which will be held at The Chattanoogan, 1201 South Broad Street, Chattanooga,
Tennessee, on Wednesday, May 2, 2001 at 4:00 p.m.(EDT).
The Notice and Proxy Statement on the following pages contain details
concerning the business to come before the meeting. Management will report on
current operations and there will be an opportunity for discussion concerning
the Company and its activities. Please sign and return your proxy card in the
enclosed envelope to ensure that your shares will be represented and voted at
the meeting even if you cannot attend. You are urged to sign and return the
enclosed proxy card even if you plan to attend the meeting.
I look forward to personally meeting all stockholders who are able to
attend.
Sincerely,
CHARLES B. LEBOVITZ
Chairman of the Board and
Chief Executive Officer
CBL & ASSOCIATES PROPERTIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 2, 2001
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of CBL &
Associates Properties, Inc., a Delaware corporation (the "Company"), will be
held at The Chattanoogan, 1201 South Broad Street, Chattanooga, Tennessee, on
Wednesday, May 2, 2001 at 4:00 p.m. (EDT) for the following purposes:
1. To re-elect two directors to serve for a term of three years and until their
respective successors are elected and qualified;
2. To act upon a proposal to ratify the selection of Arthur Andersen LLP as
independent public accountants for the Company's fiscal year ending
December 31, 2001;
3. To consider and act upon any other matters which may properly come before
the meeting or any adjournment thereof.
In accordance with the provisions of the Company's Bylaws, the Board of
Directors has fixed the close of business on March 6, 2001 as the record date
for the determination of the holders of Common Stock entitled to notice of, and
to vote at, the Annual Meeting.
Your attention is directed to the accompanying Proxy Statement.
Whether or not you plan to attend the meeting, we urge you to sign, date
and return the enclosed Proxy promptly in order to ensure representation of your
shares. An addressed envelope for which no postage is required if mailed in the
United States is enclosed for that purpose. Returning your Proxy will not
prevent you from voting your shares at the meeting if you desire to do so, as
your Proxy is revocable at your option.
By Order of the Board of Directors
STEPHEN D. LEBOVITZ
President and Secretary
Chattanooga, Tennessee
March 29, 2001
PROXY STATEMENT
CBL & ASSOCIATES PROPERTIES, INC.
6148 Lee Highway
Suite 300
Chattanooga, Tennessee 37421
ANNUAL MEETING OF STOCKHOLDERS
May 2, 2001
PROXIES
The enclosed proxy is solicited by and on behalf of the Board of Directors
of CBL & Associates Properties, Inc., a Delaware corporation (the "Company"),
for use at the annual meeting of stockholders (the "Annual Meeting") of the
Company to be held at The Chattanoogan, 1201 South Broad Street, Chattanooga,
Tennessee, on Wednesday, May 2, 2001, at 4:00 p.m. (EDT) and at any and all
postponements or adjournments thereof. Any proxy given may be revoked at any
time before it is voted by filing with the Secretary of the Company an
instrument revoking it or a duly executed proxy bearing a later date. All
expenses of the solicitation of proxies for the Annual Meeting, including the
cost of mailing, will be borne by the Company. In addition to solicitation by
mail, officers and regular employees of the Company may solicit proxies from
stockholders by telephone, telegram or personal interview and will not receive
additional compensation for such services. In addition, the Company's investor
relations firm, Corporate Communications, Inc., will, among other services
performed for the Company, assist in the solicitation of proxies. The Company
also intends to request persons holding stock in their name or custody, or in
the name of nominees, to send proxy materials to their principals and request
authority for the execution of the proxies. The Company will reimburse such
persons for their expense in so doing.
The Company anticipates mailing proxy materials and the Annual Report for
the Company's fiscal year ended December 31, 2000, to stockholders of record as
of March 6, 2001, on or about March 29, 2001.
VOTING SECURITIES
Only holders of record of the Company's Common Stock, par value $.01 per
share ("Common Stock"), at the close of business on March 6, 2001, are entitled
to vote on the matters to be presented at the Annual Meeting. The number of
shares of Common Stock outstanding on such date and entitled to vote was
25,247,198. Each such share is entitled to one vote with respect to such
matters.
The presence in person or by proxy of holders of record of a majority of
the outstanding shares of Common Stock is required for a quorum to transact
business at the Annual Meeting, but if a quorum should not be present, the
Annual Meeting may be adjourned from time to time until a quorum is obtained.
The affirmative vote of the holders of a plurality of the shares of the Common
Stock present or represented at the Annual Meeting is required for the election
of directors. The affirmative vote of the holders of a majority of the shares of
Common Stock present or represented at the Annual Meeting is required for the
ratification of the selection of the independent public accountants.
Abstentions and broker non-votes (shares held by a broker or nominee which
are represented at the Annual Meeting, but with respect to which such broker or
nominee does not have discretionary authority to vote on a particular proposal)
will be counted as present at the Annual Meeting for the purpose of determining
whether or not a quorum exists. Abstentions and broker non-votes will generally
not be counted for any other purpose, except that abstentions with respect to
any proposal, other than the election of directors, will be treated as negative
votes.
Unless contrary instructions are indicated on the accompanying proxy, the
shares represented thereby will be voted in accordance with the recommendations
of the Board of Directors.
1
ELECTION OF DIRECTORS
The Board of Directors currently consists of nine members divided into
three classes (having two, three and four members, respectively) serving
staggered three-year terms. Under the Company's Amended and Restated Certificate
of Incorporation (the "Certificate of Incorporation") and Amended and Restated
Bylaws (the "Bylaws"), a majority of the directors must be unaffiliated
("Independent Directors") with the Company and its predecessor entity, CBL &
Associates, Inc. and its affiliates ("CBL"). Each year the term of office of one
class of directors expires.
The Board of Directors intends to present for action at the Annual Meeting
the re-election of Stephen D. Lebovitz and Winston W. Walker, whose present
terms expire in 2001, to serve for a term of three years and until their
successors are duly elected and shall qualify. Mr. Walker is one of the
Company's five Independent Directors.
Unless authority to vote for such directors is withheld, the enclosed proxy
will be voted for such persons except that the persons designated as proxies
reserve discretion to cast their votes for other persons in the unanticipated
event that any of such nominees is unable or declines to serve.
Nominees
Set forth below is information with respect to the nominees for election:
Name Age Current Position(1)
- ----------------- ----- -----------------------------
Stephen D. Lebovitz 40 Director, President and
Secretary
Winston W. Walker 57 Director
- -------------------
<FN>
* The position shown represents the individual's position with the
Company and with CBL & Associates Management, Inc., a Delaware
corporation (the "Management Company"), through which the Company's
property management and development activities are conducted.
</FN>
Stephen D. Lebovitz has served as President and Secretary of the Company
since February 1999 and as a Director of the Company since the completion of its
initial public offering in November 1993. Since joining CBL in 1988, Mr.
Lebovitz has also served as Executive Vice President --
Development/Acquisitions, Executive Vice President -- Development, Senior Vice
President -- New England Office and as Senior Vice President -- Community Center
Development and Treasurer of the Company. Before joining CBL, Mr. Lebovitz was
affiliated with Goldman, Sachs & Co. from 1984 to 1986. He is the President of
the Boston Jewish Family and Children's Service, a member of the Board of
Directors of the Combined Jewish Philanthropic, Boston, Massachusetts and a
member of the Board of Directors of the Children's Hospital Trust, Boston,
Massachusetts. He is a former state director of the ICSC for the New England
states (Maine, Massachusetts, New Hampshire, Rhode Island and Vermont). Stephen
D. Lebovitz is a son of Charles B. Lebovitz and a brother of Michael I.
Lebovitz.
Winston W. Walker has served as a Director of the Company since the
completion of its initial public offering and is a member of the Executive and
Compensation Committees of the Board of Directors. Mr. Walker served as
President and Chief Executive Officer of Provident Life and Accident Insurance
Company of America ("Provident") from 1987 until October 1, 1993, and served in
various other capacities with Provident from 1974 to 1987. Mr. Walker is a
director of Olan Mills, Inc. of Chattanooga, Tennessee.
2
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" THE ELECTION OF THE
TWO DIRECTORS NAMED ABOVE
Directors and Executive Officers
Set forth below is information with respect to the directors (in addition
to Stephen D. Lebovitz and Winston W. Walker) and executive officers (in
addition to Stephen D. Lebovitz) of the Company:
Term
Name Expires* Age Current Position(1)
- ------------------- ---------- ------------- -------------------------
Charles B. Lebovitz 2002 64 Chairman of the Board of
Directors and Chief
Executive Officer
John N. Foy 2003 57 Vice Chairman of the Board
of Directors, Chief
Financial Officer and
Treasurer
Claude M. Ballard 2002 71 Director
Gary L. Bryenton 2002 61 Director
Martin J. Cleary 2003 65 Director
Leo Fields 2002 72 Director
William J. Poorvu 2003 65 Director
Ben S. Landress - 73 Executive Vice President -
Management
Ronald L. Fullam - 58 Senior Vice President -
Development
Ronald S. Gimple - 61 Senior Vice President
and General Counsel
Michael I. Lebovitz - 37 Senior Vice President - Mall
Projects
Farzana K. Mitchell - 49 Senior Vice President -
Finance
George R. (Buck)
Sappenfield - 50 Senior Vice President -
Asset Management
Jerry L. Sink - 50 Senior Vice President - Mall
Management
Eric P. Snyder - 51 Senior Vice President and
Director of
Corporate Leasing
Augustus N. Stephas - 58 Senior Vice President -
Accounting and
Controller
R. Stephen Tingle - 55 Senior Vice President -
Community Center Development
- ------------------
<FN>
(1) Indicates expiration of term as a director.
(2) The position shown represents the individual's position with the
Company and with the Management Company.
</FN>
3
Charles B. Lebovitz has served as Chairman of the Board and Chief Executive
Officer since the completion of the Company's initial offering and is a member
of the Executive Committee of the Board of Directors. Mr. Lebovitz served as
President of the Company until February 1999. Prior to the Company's formation,
he served in a similar capacity with CBL. Mr. Lebovitz has been involved in
shopping center development since 1961 when he joined his family's development
business. In 1970, he became affiliated with Arlen Realty & Development Corp.
("Arlen") where he served as President of Arlen's shopping center division, and,
in 1978, he founded CBL together with his associates (the "Associates"),
including John N. Foy and Ben S. Landress. Mr. Lebovitz is an advisory director
of First Tennessee Bank, N.A., Chattanooga, Tennessee and a national vice
chairman of the United Jewish Appeal. Mr. Lebovitz has previously served as a
trustee, vice president (Southern Division) and chairman of the International
Council of Shopping Centers ("ICSC").
John N. Foy has served as Vice Chairman of the Board of Directors and
Treasurer of the Company since February 1999 and as a Director and Chief
Financial Officer of the Company since the completion of its initial public
offering. Until February 1999, he served as Executive Vice President -- Finance
and Secretary of the Company. Mr. Foy is a member of the Executive Committee of
the Board of Directors. Prior to the Company's formation, he served in similar
executive capacities with CBL. Mr. Foy has been involved in the shopping center
industry since 1969 when he joined the Lebovitz family's shopping center
development business. In 1970, he became affiliated with the shopping center
division of Arlen, and, in 1978, joined Charles B. Lebovitz as an Associate in
establishing CBL. Mr. Foy served as chairman of the board of First Fidelity
Savings Bank in Crossville, Tennessee from December 1985 until April 1994. Mr.
Foy currently serves as a member of the advisory board of AmSouth Bank of
Chattanooga, Tennessee and as a director of the Chattanooga Airport Authority
and Chattanooga Neighborhood Enterprise.
Claude M. Ballard, CRE, M.A.I. has served as a Director of the Company
since the completion of its initial public offering and is Chairman of the
Compensation Committee and a member of the Audit Committee of the Board of
Directors. Mr. Ballard has served as a general partner, limited partner and
senior consultant of Goldman Sachs & Co. and as a Senior Vice President in the
real estate division of the Prudential Insurance Company of America. He is
currently a director of Quapaw Council, Boy Scouts of America and Horizon Hotel
Corp. Mr. Ballard has also served as chairman of the board of Rockefeller Center
Properties, Inc., a mortgage real estate investment trust, and as a director of
American Building Maintenance Industries, Bedford Property Investors, The MONY
Group (formerly, Mutual Life Insurance Company of New York) and Taubman Centers,
Inc., a shopping center real estate investment trust . Mr. Ballard currently
serves as chairman of the board of directors of Merit Equity Partners, Inc.
Gary L. Bryenton joined the Company as a Director on January 31, 2001 upon
completion of the Company's acquisition of a portfolio of 21 malls and 2
associated centers from Jacobs Realty Investors Limited Partnership and certain
of its affiliates and partners. See "Jacobs Acquisition". Mr. Bryenton is the
executive partner of the law firm of Baker & Hostetler, LLP. He currently serves
as chairman of the board of trustees of Heidelberg College and is a board member
of the Cleveland Orchestra, the National Conference for Community and Justice,
the Greater Cleveland Growth Association and the Rock and Roll Hall of Fame
Museum.
Martin J. Cleary joined the Company as Director on January 31, 2001 upon
the completion of the Jacobs Acquisition. Mr. Cleary has announced his
retirement as president and chief operating officer of the Richard E. Jacobs
Group, Inc. effective on March 31, 2001. He is currently a director of Guardian
Life Insurance Company and the Lamson & Sessions Company. Mr. Cleary is also an
ex-officio trustee and former chairman of the ICSC.
Leo Fields has served as a Director of the Company since the completion of
its public offering and is a member of the Compensation Committee and Chairman
of the Audit Committee of the Board of Directors. Mr. Fields is co-chairman of
Weisberg & Fields, Inc., an investment advisory firm he started in 1991. From
1984 through 1991, Mr. Fields directed Leo Fields Interests, a private
investment firm. He was affiliated with Zale Corporation from 1947 until his
retirement in 1984, serving, from 1981 to 1984, as vice chairman and a member of
Zale's executive committee. He is president of the Dallas Home for the Jewish
Aged Endowment Foundation and a director of the M. B. and Edna Zale Foundation.
4
William J. Poorvu has served as a Director of the Company since the
completion of its initial public offering and is a member of the Compensation
and Audit Committees of the Board of Directors. Mr. Poorvu has, since 1981, been
a professor at Harvard Business School specializing in real estate courses. Mr.
Poorvu is also managing partner in several private real estate companies and has
previously consulted for a number of real estate concerns. He is chairman of the
board of advisors of Baupost Group, L.L.C. and a trustee/director of mutual
funds in the Massachusetts Financial Services Group of Funds.
Ben S. Landress has served as Executive Vice President -- Management of the
Company since January 1997. Prior to that time, Mr. Landress served as Senior
Vice President -- Management of the Company and prior thereto, he served in a
similar capacity with CBL. Mr. Landress directs the day-to-day management of the
Company's properties and is responsible for general corporate administration.
Mr. Landress has been involved in the shopping center business since 1961 when
he joined the Lebovitz family's development business. In 1970, he became
affiliated with Arlen's shopping center division, and, in 1978, joined Mr.
Lebovitz as an Associate in establishing CBL.
Ronald L. Fullam has served as Senior Vice President -- Development of the
Company since January 1997. Prior to that time, Mr. Fullam served as Vice
President -- Development of the Company. Mr. Fullam joined Arlen's shopping
center development division as a project manager in August 1977 and CBL as a
Vice President upon its formation in 1978.
Ronald S. Gimple has served as Senior Vice President and General Counsel of
the Company since January 1997. Mr. Gimple joined the Company in 1994 as Vice
President -- Development. Prior to joining the Company, Mr. Gimple served as a
vice president of The Edward J. DeBartolo Corporation, from 1987 to 1994, and,
prior to 1987, he served as general counsel of Petrie Store Corporation, vice
president and real estate counsel of BATUS Retail Group and vice president and
general counsel of General Growth Company.
Michael I. Lebovitz has served as Senior Vice President-- Mall Projects of
the Company since January 1997. Prior to that time, Mr. Lebovitz served as Vice
President-- Development and as a project manager for the Company. Mr. Lebovitz
joined CBL in 1988 as a project manager for CoolSprings Galleria in Nashville,
Tennessee and was promoted to Vice President in 1993. Prior to joining CBL, he
was affiliated with Goldman, Sachs & Co. from 1986 to 1988. He is vice president
of the Jewish Community Federation of Greater Chattanooga and serves on the
board of trustees of the United Jewish Communities. Michael I. Lebovitz is a son
of Charles B. Lebovitz and a brother of Stephen D. Lebovitz.
Farzana K. Mitchell has served as Senior Vice President -- Finance of the
Company since September 2000. Prior to joining the Company, Ms. Mitchell was an
officer of Lend Lease Real Estate Investments in Atlanta, Georgia, having joined
that company in 1983. From 1976 to 1982, Ms. Mitchell served as deputy chief
financial officer of IRT Property Company, a real estate investment trust.
George R. (Buck) Sappenfield has served as Senior Vice President -- Asset
Management for the Company since joining the Company in May 2000. Prior to that
time from 1993 until joining the Company, he served as president -- real estate
of The Limited, Inc. and from 1983 to 1993, he served as vice president -- real
estate and director of real estate -- south of The Limited, Inc. From 1972 to
1983, Mr. Sappenfield was affiliated with Melvin Simon and Associates.
5
Jerry L. Sink, C.S.M. has served as Senior Vice President -- Mall
Management for the Company since February 1998. Prior to that time, Mr. Sink
served as Vice President -- Mall Management. Prior to joining the Company, Mr.
Sink served as vice president of Retail Management of Equitable Real Estate,
Chicago, Illinois, from January 1988 to June 1993 and prior to June 1988, he was
affiliated with General Growth Companies, Inc. as Vice President of Management.
Eric P. Snyder has served as Senior Vice President and Director of
Corporate Leasing for the Company since January 1997. Mr. Snyder joined CBL as a
project manager in 1978 and was promoted to Vice President in 1984 and to
Director of Corporate Leasing in 1992. From 1974 to 1978, Mr. Snyder was a
leasing agent and project manager in Arlen's shopping center division.
Augustus N. Stephas has served as Senior Vice President -- Accounting and
Controller for the Company since January 1997. Mr. Stephas joined CBL in July
1978 as Controller and was promoted to Vice President in 1984. From 1970 to
1978, Mr. Stephas was affiliated with the shopping center division of Arlen,
first as accountant and later as assistant controller.
R. Stephen Tingle has served as Senior Vice President - Community Center
Development since January 2000. Prior to that time, Mr. Tingle served as Vice
President and Director of Community Center Development - Chattanooga Office. Mr.
Tingle joined CBL in 1986 as a project manager for independent community and
neighborhood shopping centers and was promoted to Vice President of Development
in 1988. From 1978 to 1986, Mr. Tingle engaged in the practice of law.
Board of Directors' Meetings and Committees
The Board of Directors has established standing Executive, Audit and
Compensation Committees. The Board of Directors has no standing Nominating
Committee. The Board of Directors met 11 times during 2000. Each director
attended more than 75% of the total number of Board meetings and meetings of
Board committees on which the director served during fiscal year 2000.
Executive Committee. The Executive Committee is composed of Charles B.
Lebovitz (Chairman), John N. Foy and Winston W. Walker, who is an Independent
Director. The Executive Committee may exercise all the powers and authority of
the Board of Directors of the Company in the management of the business and
affairs of the Company as permitted by law except with respect to (i) the
declaration of dividends, (ii) issuance of stock, (iii) amendment to the
Company's Certificate of Incorporation or Bylaws, (iv) filling vacancies on the
Board of Directors, (v) approval of borrowings in excess of $40 million per
transaction or series of related transactions, (vi) hiring executive officers,
(vii) approval of acquisitions or dispositions of property or assets in excess
of $40 million per transaction and (viii) certain transactions between the
Company and its directors and officers and certain sales of real estate and
reductions of debt that produce disproportionate tax allocations to CBL pursuant
to the Company's Bylaws. The Executive Committee met 4 times and took action by
unanimous written consent 1 time during 2000.
Audit Committee. The Audit Committee is composed of Leo Fields (Chairman),
Claude M. Ballard and William J. Poorvu, all of whom are Independent Directors.
The Audit Committee makes recommendations concerning the engagement of
independent public accountants and the plans and results of the audit
engagement, approves professional services provided by the independent public
accountants, considers the range of audit and non-audit fees and reviews the
adequacy of the Company's internal accounting controls. The Audit Committee met
2 times during 2000.
6
Compensation Committee. The Compensation Committee is composed of Claude M.
Ballard (Chairman), Leo Fields, William J. Poorvu and Winston W. Walker, all of
whom are Independent Directors. The Compensation Committee reviews and approves
compensation programs generally and, specifically, salaries, bonuses, stock
awards and stock options for officers of the Company of the level of vice
president or higher. The Compensation Committee met 3 times and took action by
unanimous written consent 1 time during 2000.
Compensation of Directors
During 2000, each Independent Director received from the Company an annual
fee of $20,000. In addition to the annual fee, each Independent Director
received a meeting fee of $1,000 for each Board or Audit or Compensation
Committee meeting attended and $500 for each telephonic Board meeting attended
and reimbursement of expenses incurred in attending meetings. Each Independent
Director serving as a member of the Executive Committee received from the
Company a monthly fee of $500 in lieu of meeting fees for each Executive
Committee meeting.
Each Independent Director, on December 31 of each fiscal year of the
Company, automatically receives an annual grant of options to purchase 500
shares of Common Stock having an exercise price equal to 100% of the fair market
value of the shares of Common Stock on the date of grant of such option. The
options granted to the Independent Directors on December 31, 2000 have an
exercise price equal to $25.5625 per share (based upon the average of the high
and low sales prices of the Common Stock on the New York Stock Exchange ("NYSE")
on December 29, 2000, the last trading day of 2000). Each holder of a director
option granted pursuant to this arrangement also has the same rights as other
holders of options in the event of a change in control. By Resolution dated
April 30, 1996, the Compensation Committee adopted certain additional terms for
options granted to the Independent Directors. Pursuant to the Resolution,
options granted to the Independent Directors (i) shall have a term of 10 years
from date of grant, (ii) are 100% vested upon grant, (iii) are non-forfeitable
except upon the Independent Director's conviction for any criminal activity
involving the Company or, if non-exercised, within one year following the date
the Independent Director ceases to be a director of the Company, and (iv) are
non-transferable. In addition, any person who becomes an Independent Director
will receive an initial grant of 500 shares of Common Stock upon joining the
Board of Directors. The transfer of such shares is restricted during the
Independent Director's term and for one year thereafter pursuant to the Stock
Incentive Plan.
Gary L. Bryenton joined the Board as an Independent Director on January 31,
2001 and will be compensated for his services as an Independent Director. Martin
J. Cleary joined the Board as a Director on January 31, 2001 and will be
compensated for his services to the same extent as the Independent Directors.
7
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information available to the Company as of
March 6, 2001, with respect to the ownership of Common Stock by (i) each person
known to the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock, (ii) each director of the Company, (iii) each named
executive officer of the Company, as defined below, and (iv) all directors and
executive officers as a group. Except as otherwise indicated, each person named
below has sole investment and voting power with respect to the securities shown.
Except as otherwise indicated, the address of each person is the Company's
address.
Number of Rule 13d-3 Fully-Diluted
Shares(1) Percentage(1) Percentage(2)
--------- ------------- -------------
FMR Corp.(3).......................................... 1,658,413 6.57% 3.33%
82 Devonshire Street
Boston, Massachusetts 02019
Public Employees Retirement System of Ohio(4)......... 1,500,000 5.94 3.02
277 East Town Street
Columbus, Ohio 43215
CBL & Associates, Inc.(5)............................. 8,805,243 27.11 15.45
Charles B. Lebovitz(6)................................ 9,783,796 29.22 16.87
John N. Foy(7)........................................ 440,600 1.72 *
Stephen D. Lebovitz(8)................................ 487,268 1.90 *
Eric P. Snyder(9)..................................... 144,286 * *
Augustus N. Stephas(10)............................... 88,966 * *
Claude M. Ballard(11)................................. 37,500 * *
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
William J. Poorvu(11)................................. 24,277 * *
c/o Investment Resource Group
44 Brattle Street
Cambridge, Massachusetts 02138
Winston W. Walker(11)................................. 47,600 * *
1069 Constitution Drive
Chattanooga, Tennessee 37405
Leo Fields(12)........................................ 63,300 * *
c/o Weisberg & Fields, Inc.
Preston Commons East
8115 Preston Road
Dallas, Texas 75225
Gary L. Bryenton...................................... 500 * *
Baker & Hostetler, LLP
3200 National City Center
1900 East 9th Street
Cleveland, Ohio 44114-3485
Martin J. Cleary (13)................................. 500 * *
25408 Lake Road
Bay Village, Ohio 44140
All executive officers and directors as a group (19 11,670,544 33.50 19.67
persons)..............................................
- ----------------
<FN>
* Less than 1%
8
(1) The Company conducts all of its business activities through CBL &
Associates Limited Partnership, a Delaware limited partnership (the
"Operating Partnership"). Pursuant to the second amended and restated
partnership agreement of the Operating Partnership (the "Partnership
Agreement"), each of the partners of the Operating Partnership, which
include, among others, CBL and certain of the executive officers named in
this Proxy Statement, has the right ("CBL Rights") to exchange all or a
portion of its common partnership units in the Operating Partnership for
shares of Common Stock or their cash equivalent, at the Company's
election. Additionally, on January 31, 2001, the Operating Partnership
issued to certain affiliates of Jacobs Realty Investors Limited
Partnership 12,358,187 special common units of the Operating Partnership
("SCUs"). SCUs may, at any time after the earlier of (i) January 31,
2004, or (ii) the death of the beneficial owner of the SCUs (the
"Exchange Date"), be exchanged for cash, shares of the Company's Common
Stock (or a one-for-one basis) or any combination of cash or shares of
Common Stock, at the Company's election. See "Jacobs Acquisition" and
"Certain Relationships and Related Transactions." Under the terms of Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), shares of Common Stock that may be acquired within
60 days are deemed outstanding for purposes of computing the percentage
of Common Stock owned by a stockholder. Therefore, percentage ownership
of the Common Stock is computed based on the sum of (i) 25,247,198 shares
of Common Stock actually outstanding as of March 6, 2001, (ii) 8,600,159
shares of Common Stock that may be acquired upon exercise of CBL Rights
by the individual or entity whose percentage of share ownership is being
computed (but not taking account of the exercise of CBL Rights by any
other person or entity) and (iii) 992,000 shares of Common Stock that may
be acquired within 60 days of March 6, 2001 upon the exercise of
outstanding options. Amounts shown were determined without regard to
applicable Ownership Limits. Because of the restriction on exchange of
SCUs prior to the Exchange Date, percentage ownership of Common Stock is
computed without taking into account any exchange of SCUs for shares of
Common Stock.
(2) Calculated based on 25,247,198 shares of Common Stock outstanding and
assuming full exercise of all CBL Rights for shares of Common Stock by
all holders of common units of the Operating Partnership as well as the
exchange of all SCUs for shares of Common Stock (in each case, without
regard to applicable Ownership Limits) for an aggregate of 49,733,081
shares of Common Stock. Calculation does not include 2,247,517 shares of
Common Stock subject to outstanding stock options other than, with
respect to each person whose fully-diluted percentage is being computed,
shares which may be acquired within 60 days upon the exercise of
outstanding options.
(3) In a Schedule 13G/A filed on February 13, 2001 by FMR Corp. and certain
of its affiliates ("FMR"), FMR reported that as of December 31, 2000 it
beneficially owned 1,658,413 shares of Common Stock, or 6.57% of the
total shares outstanding as of March 6, 2001. FMR reported that it
possesses (i) sole dispositive power with respect to 1,658,413 shares of
Common Stock and (ii) sole voting power with respect to 354,000 shares of
Common Stock. The Schedule 13G/A also states that FMR has not acquired
the Company's shares for the purpose of changing or influencing the
control of the Company.
(4) In a Schedule 13G filed on Febnuary 6, 2001 by the Public Employees
Retirement System of Ohio ("Ohio PERS"), Ohio PERS reported that as of
December 31, 2000, it beneficially owned 1,500,000 shares of Common
Stock, or 5.94% of the total shares outstanding as of March 6, 2001. Ohio
PERS reported that it possesses sole dispositive power and sole voting
power with respect to 1,500,000 shares of Common Stock.
(5) Includes (i) 1,470,054 shares of Common Stock owned directly, (ii)
7,237,823 shares of Common Stock which may be acquired upon the exercise
of CBL Rights and (iii) 97,366 shares of Common Stock which may be
acquired by four entities controlled by CBL & Associates, Inc. (CBL
Employees Partnership/Conway, Foothills Plaza Partnership, Girvin Road
Partnership and Warehouse Partnership) upon the exercise of CBL Rights.
9
(6) Includes (i) 57,601 shares of Common Stock owned directly, (ii) 3,108
shares owned by Mr. Lebovitz' wife, 12,547 shares held in trusts for the
benefit of his step-daughter and grandchildren (of which Mr. Lebovitz
disclaims beneficial ownership) and 101,600 shares which may be acquired
upon the exercise of CBL Rights and held in trusts for the benefit of Mr.
Lebovitz and his sister, (iii) 352,903 shares of Common Stock which may
be acquired upon the exercise of CBL Rights, (iv) 195,200 shares of
Common Stock subject to options granted under the Stock Incentive Plan
which are currently exercisable with respect to such shares, (v) 27,400
shares of Common Stock subject to options granted under the Stock
Incentive Plan which become exercisable with respect to such shares
within sixty days of March 6, 2001, (vi) 8,805,243 shares of Common Stock
beneficially owned by CBL, which Mr. Lebovitz may be deemed to
beneficially own by virtue of his control of CBL, and (vii) 228,194
shares of Common Stock that may be acquired by College Station
Associates, an entity controlled by Mr. Lebovitz, upon the exercise of
CBL Rights.
(7) Includes (i) 103,159 shares of Common Stock owned directly, (ii) 189,241
shares of Common Stock which may be acquired upon the exercise of CBL
Rights, (iii) 130,600 shares of Common Stock subject to options granted
under the Stock Incentive Plan which are currently exercisable with
respect to such shares, and (iv) 17,600 shares of Common Stock subject to
options granted under the Stock Incentive Plan which become exercisable
with respect to such shares within sixty days of March 6, 2001.
(8) Includes (i) 82,532 shares owned directly, (ii) 238,936 shares of Common
Stock which may be acquired upon the exercise of CBL Rights, (iii)
143,400 shares of Common Stock subject to options granted under the Stock
Incentive Plan which are currently exercisable with respect to such
shares, and (iv) 22,400 shares of Common Stock subject to options granted
under the Stock Incentive Plan which become exercisable with respect to
such shares within sixty days of March 6, 2001.
(9) Includes (i) 9,500 shares of Common Stock owned directly, (ii) 6,283
shares of Common Stock owned by Mr. Snyder's wife and 864 shares of
Common Stock owned by Mr. Snyder's children, (iii) 48,439 shares of
Common Stock which may be acquired upon the exercise of CBL Rights, (iv)
66,600 shares of Common Stock subject to options granted under the Stock
Incentive Plan which are currently exercisable with respect to such
shares, and (v) 12,600 shares of Common Stock subject to options granted
under the Stock Incentive Plan which become exercisable with respect to
such shares within sixty days of March 6, 2001.
(10) Includes (i) 3,665 shares of Common Stock owned directly, (ii) 31 shares
of Common Stock owned by Mr. Stephas' wife, (iii) 27,670 shares of Common
Stock which may be acquired upon the exercise of CBL Rights, (iv) 45,000
shares of Common Stock subject to options granted under the Stock
Incentive Plan which are currently exercisable with respect to such
shares, and (v) 12,600 shares of Common Stock subject to options granted
under the Stock Incentive Plan which become exercisable with respect to
such shares within sixty days of March 6, 2001.
(11) Includes 3,500 shares of Common Stock subject to immediately exercisable
stock options granted to Mr. Ballard, Mr. Poorvu and
Mr. Walker on December 31 of each of the years 1994 through 2000 in the
amounts of 500 stock options per grant pursuant to the
Stock Incentive Plan.
(12) Includes (i) 20,500 shares of Common Stock owned by a family limited
partnership created by Mr. Fields and his wife on January 1, 1997 and in
which Mr. Fields serves as a general partner, (ii) 40,300 shares of
Common Stock held by members of Mr. Fields' family, with respect to which
Mr. Fields acts as investment adviser and of which Mr. Fields disclaims
beneficial ownership, and (iii) 2,500 shares of Common Stock subject to
immediately exercisable stock options granted under the Stock Incentive
Plan.
(13) Does not include 215,277 SCUs beneficially owned by Mr. Cleary.
10
</FN>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons who own more than ten percent of a registered
class of the Company's equity securities to file with the Securities and
Exchange Commission ("SEC") initial reports of ownership and reports of changes
in beneficial ownership of Common Stock and other equity securities of the
Company. Officers, directors and greater than ten percent stockholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) reports they file.
Based solely upon the Company's review of copies of such reports furnished
to it through the date hereof, or written representations that no reports were
required to be filed, the Company believes that during the fiscal year ended
December 31, 2000 there was full compliance with all filing requirements
applicable to its officers, directors and ten percent stockholders with the
exception of one executive officer (R. Stephen Tingle) failing to timely file an
initial statement of beneficial ownership. This filing was subsequently made.
11
EXECUTIVE COMPENSATION
The following table sets forth information regarding the compensation of
the Company's Chief Executive Officer and its next four most highly compensated
executive officers (these four and Charles B. Lebovitz being herein referred to
as the "named executive officers") for the Company's fiscal year ended December
31, 2000 and for the Company's fiscal years ending December 31, 1999 and 1998:
Summary Compensation Table(1)
Long Term Compensation
----------------------------------
Annual Compensation Awards Payouts
----------------------------------- ----------------------- --------
Other Restricted Securities All
Annual Stock Underlying LTIP Other
Name and Principal Compensation Award(s) Options Payouts Compensation
Position(2) Year Salary($) Bonus($) ($) ($)(3) (#) ($) ($)
- --------------------- ---- --------- -------- ------------ ---------- ---------- ------- ------------
Charles B. 2000 467,987 -- -- 275,000 16,000 -- 9,197(4)
Lebovitz, 1999 454,356 -- -- 200,000 16,000 -- 9,197(5)
Chairman of the 1998 441,122 508 -- 100,000 15,000 -- 8,124(6)
Board and Chief
Executive
Officer
John N. Foy, 2000 366,320 -- -- 375,000 16,000 -- 9,197(4)
Director, Vice 1999 343,820 -- -- 200,000 41,000 -- 8,561(5)
Chairman of the 1998 296,320 508 -- 225,000 8,000 -- 8,124(6)
Board, Chief
Financial
Officer
and Treasurer
Stephen D. 2000 282,223 -- -- 400,000 16,000 -- 9,197(4)
Lebovitz 1999 259,723 -- -- 200,000 41,000 -- 8,109(5)
Director, 1998 212,223 254 -- 200,000 16,000 -- 7,957(6)
President and
Secretary
Eric P. Snyder 2000 311,000 -- 150,000(7) -- 9,000 -- 6,628(4)
Senior Vice 1999 291,000 -- 150,000(7) -- 9,000 -- 8,358(5)
President 1998 271,000 508 100,000(7) -- 9,000 -- 7,957(6)
and Director of
Corporate
Leasing
Augustus N. 2000 334,000 100,000 -- -- 9,000 -- 6,628(4)
Stephas 1999 314,000 75,000 -- -- 9,000 -- 8,630(5)
Senior Vice 1998 294,100 50,508 -- -- 9,000 -- 7,957(6)
President --
Accounting and
Controller
- -----------------------
<FN>
(1) All amounts shown represent compensation paid to the named
executive officers by the Management Company.
(2) The position shown represents the individual's position with the
Company and the Management Company.
12
(3) Amounts shown are based upon the closing price of the Common
Stock on the NYSE as of the date of grant of the restricted
stock awards. As of December 31, 1998, 20,917 shares of
restricted stock with a value as of December 31, 2000 of
$529,462 were outstanding and held as follows: (i) Charles
Lebovitz - 3,792 shares with a value of $95,985; (ii) John Foy -
9,095 shares with a value of $230,217; and (iii) Stephen
Lebovitz - 8,030 shares with a value of $203,259. The additional
20,917 shares of restricted stock held by the above stated
executive officers as of December 31, 1998 will vest as follows:
Charles Lebovitz's 3,792 shares will vest on October 28, 2002,
John Foy's 9,095 shares vested in January, 1999, and 5,116 of
Stephen Lebovitz's shares vested in 2000 and 2,914 shares will
vest in 2003. As of December 31, 1999, 20,199 shares of
restricted stock with a value as of December 31, 2000 of
$511,287 were outstanding and were held as follows: (i) Charles
Lebovitz - 9,170 shares with a value of $232,116; (ii) John Foy
- 3,949 shares with a value of $99,959; and (iii) Stephen
Lebovitz - 7,080 shares with a value of $179,213. The additional
20,199 shares of restricted stock held by the above stated
executive officers as of December 31, 1999 will vest as follows:
Charles B. Lebovitz's 9,170 shares will vest on October 25,
2003; John Foy's 3,949 shares vested on January 1, 2000 and
Stephen Lebovitz's 7,080 shares will vest in 2004. As of
December 31, 2000, 29,185 shares of restricted stock with a
value as of December 31, 2000 of $738,743 were outstanding and
held as follows: (i) Charles B. Lebovitz - 11,459 shares with a
value of $290,056; and (ii) Stephen D. Lebovitz - 17,726 shares
with a value of $448,689. The additional 29,185 shares of
restricted stock held by the above stated executive officers as
of December 31, 2000 will vest as follows: Charles B. Lebovitz's
11,459 shares will vest in 2004 and Stephen D. Lebovitz's 17,726
shares will vest in 2005. During the vesting period, dividends
will be paid on all outstanding shares of restricted stock. All
of the shares of restricted stock were issued pursuant to the
Stock Incentive Plan.
(4) For fiscal year 2000, amount shown represents term life
insurance premiums paid by the Management Company and matching
contributions by the Management Company under the CBL &
Associates Management, Inc. 401(k) Profit Sharing Plan and Trust
(the "401(k) Plan").
(5) For fiscal year 1999, amount shown represents term life
insurance premiums paid by the Management Company and matching
contributions by the Management Company under the 401(k) Plan.
(6) For fiscal year 1998, amount shown represents term life
insurance premiums paid by the Management Company and matching
contributions by the Management Company under the 401(k) Plan.
(7) Represents amount deferred at Mr. Snyder's election pursuant to
a non-qualified deferred compensation arrangement between
Mr. Snyder and the Company.
</FN>
The following table sets forth information regarding grants of stock
options made during fiscal year 2000 to each of the named executive officers:
Option Grants in Last Fiscal Year
% of Total Potential Realizable
Number of Options Value at Assumed
Securities Granted to Annual Rates of Stock
Underlying Employees Exercise Price Appreciation For
Options in or Base -------------------------
Individual Grants Granted Fiscal Price Expiration
Name (#)(1) Fiscal Year(2) ($/Sh)(3) Date 5% 10%
- ------------------- -------------- --------------- --------------- ---------- -------------------------
Charles B. Lebovitz 16,000 4.27 23.7190 5/03/10 $238,668 $604,832
John N. Foy 16,000 4.27 23.7190 5/03/10 238,668 604,832
Stephen D. Lebovitz 16,000 4.27 23.7190 5/03/10 238,668 604,832
Eric P. Snyder 9,000 2.40 23.7190 5/03/10 134,251 340,218
Augustus N. Stephas 9,000 2.40 23.7190 5/03/10 134,251 340,218
-------------------
13
<FN>
(1) All options granted to the named executive officers were granted
pursuant to the Stock Incentive Plan. All options granted to the
named executive officers were granted on May 3, 2000 and become
exercisable in five equal annual installments beginning May 3,
2001.
(2) Percentages listed are based on options to purchase a total of
375,000 shares of Common Stock granted by the Company to certain
of its officers and employees during fiscal year 2000.
Calculations do not include options to purchase an aggregate of
2,000 shares of Common Stock granted to Claude M. Ballard, Leo
Fields, William J. Poorvu and Winston W. Walker in fiscal year
2000 pursuant to the Stock Incentive Plan.
(3) The exercise price is generally payable in cash or, in certain
circumstances by the surrender, at the fair market value on the
date on which the option is exercised, of shares of Common
Stock.
(4) Potential realizable value is calculated based on an assumption
that the fair market value of the Common Stock appreciates at
the annual rates shown (5% and 10%), compounded annually, from
the date of grant until the end of the option term (10 years).
The 5% and 10% assumed rates are mandated by the SEC for
purposes of calculating realizable value and do not represent
the Company's estimate or projection of future stock prices.
</FN>
Aggregated 2000 Year-End Option Values
The following table provides information regarding the number and value of
options held by each of the named executive officers at December 31, 2000. No
options were exercised by any named executive officer during the Company's 2000
fiscal year.
Number of Securities Underlying Value of Unexercised
Shares Unexercised Options at In-the-Money
Acquired Value December 31, 2000 Options at December 31, 2000
on Realized ------------------------------- ------------------------------
Name Exercise(#) ($) Exercisable Unexercisable Exercisable Unexercisable(1)
- --------------------- ----------- -------- ------------------------------- ------------------------------
Charles B. Lebovitz -0- -0- 195,200 61,800 $957,536 $124,863
John N. Foy -0- -0- 130,600 46,400 530,649 83,345
Stephen D. Lebovitz -0- -0- 143,400 57,600 550,748 99,994
Eric P. Snyder -0- -0- 66,600 32,400 299,249 56,247
Augustus N. Stephas -0- -0- 55,800 32,400 237,374 56,247
<FN>
(1) Amounts listed are based upon the $25.3125 closing price for the Common
Stock on the NYSE on December 29, 2000 (last trading day in 2000).
</FN>
Non-Competition Arrangements
Charles B. Lebovitz has agreed to refrain from competing with the Company
until the later of (i) November 3, 2003 or (ii) two years from the date of
termination of his employment. Each of John N. Foy and Stephen D. Lebovitz has
agreed to refrain from competing with the Company until two years from the date
of termination of his employment. Prohibited competition includes any
participation in the development, improvement or construction of any shopping
center project, acquiring any interest in a shopping center project or acquiring
vacant land for development as a shopping center project. Charles B. Lebovitz,
John N. Foy and Stephen D. Lebovitz are, however, permitted to hold certain
investments which they owned prior completion of the Company's initial public
offering in November 1993.
Compensation Committee Interlocks and Insider Participation
14
The Compensation Committee of the Board of Directors consists of Claude M.
Ballard, Leo Fields, William J. Poorvu and Winston W. Walker, with Mr. Ballard
serving as Chairman. None of the members of the Compensation Committee are or
have been officers or employees of the Company and each member of the
Compensation Committee is an Independent Director.
No executive officer of the Company served on any board of directors or
compensation committee of any entity (other than the Company or its
subsidiaries) with which any member of the Compensation Committee is affiliated.
Report of the Compensation Committee of the Board of Directors
General. The Company is a self-managed, self-administered, fully-integrated
real estate company which is engaged in the ownership, marketing, management,
leasing, expansion, development, redevelopment, acquisition and financing of
regional malls and community and neighborhood centers.
The Company operates through its two wholly-owned subsidiaries, CBL
Holdings I, Inc., a Delaware corporation ("CBL Holdings I"), and CBL Holdings
II, Inc., a Delaware corporation ("CBL Holdings II"). By transfers dated April
1, 1997, the Company assigned its interests in the Operating Partnership to CBL
Holdings I and CBL Holdings II, which resulted in CBL Holdings I becoming the
2.8% sole general partner of the Operating Partnership and CBL Holdings II
becoming a 69% limited partner of the Operating Partnership. The Company
conducts substantially all of its business through the Operating Partnership. To
comply with certain technical requirements of the Internal Revenue Code of 1986,
as amended (the "Code") applicable to real estate investment trusts, the
Operating Partnership carries out the Company's property management and
development activities through the Management Company.
Neither the Company nor the Operating Partnership has any paid employees.
Although Charles B. Lebovitz and the other executive officers named in this
Proxy Statement are executive officers of the Company, their compensation is in
the form of a base salary and bonus paid entirely by the Management Company.
The Compensation Committee determines all matters related to the
compensation of all officers of the Company of the level of vice president or
higher and administers the Stock Incentive Plan.
Philosophy. It is the philosophy of the Company to ensure that executive
compensation be directly linked to financial objectives that the Company
believes are primary determinates of stockholder value over time. The
Compensation Committee's objectives in administering the Company's executive
compensation plan are to ensure that pay levels and incentive compensation are
(i) competitive in attracting and retaining the best personnel, (ii) properly
linked to the Company's performance, and (iii) simple in design. To fulfill
these objectives, the compensation plan for executives includes base salary,
performance based discretionary bonuses and periodic grants of stock awards and
stock options pursuant to the Stock Incentive Plan. Non-executive employees of
the Company are also eligible to participate in the Stock Incentive Plan.
The Company believes that the ability to use the Stock Incentive Plan to
attract and retain key personnel has substantial value and will be essential to
the growth of the Company. The stock option and stock award elements of
compensation are designed to encourage and create ownership and retention of the
Company's stock by key employees in order to align their long-range interests
with those of stockholders and to allow the opportunity for key employees to
build, through the achievement of corporate goals, a meaningful ownership stake
in the Company.
Financial Criteria. The Compensation Committee, based on recommendations
made by the Company, implemented an executive compensation program in 1994
pursuant to which officers of the level of vice president and higher received
during fiscal year 2000, in addition to a base salary, incentive compensation
consisting of cash, stock options and stock awards for the achievement of target
levels of performance determined by the Compensation Committee. The amount of
this additional compensation was determined for each executive officer based
upon his contribution to the overall success of the Company. Utilizing the
program's basic theory for incentive compensation, cash, stock options and stock
awards were granted during fiscal year 2000 to other employees of the Company as
performance-based incentive compensation.
Compensation of the Chief Executive Officer. Charles B. Lebovitz was paid a
base salary of $467,987 for 2000. Mr. Lebovitz receives annual reviews for
salary increases and discretionary bonuses. Additionally, Mr. Lebovitz
participates in the Company's incentive plans, including the Stock Incentive
Plan. During fiscal year 2000, Mr. Lebovitz received options to purchase 16,000
shares of Common Stock and awards of an aggregate of 17,105 shares of Common
Stock under the Stock Incentive Plan. The awards were determined upon the same
criteria as applied to the other executive officers of the Company.
Policy Regarding Qualifying Compensation. Section 162(m) of the Code
imposes a $1,000,000 ceiling on tax-deductible remuneration paid to the five
most highly compensated executive officers of a publicly-held corporation. The
limitation does not apply to remuneration payable solely on account of the
attainment of one or more performance goals approved by a compensation
committee. An amendment to the Company's Stock Incentive Plan was adopted in
1996 that limits the number of stock options that may be granted to an employee
in any calendar year. This amendment conforms the Stock Incentive Plan to the
requirements of "performance-based compensation" exempt from the deductibility
limitations of Section 162(m) of the Code.
COMPENSATION COMMITTEE
Claude M. Ballard (Chairman)
Leo Fields
William J. Poorvu
Winston W. Walker
16
Report of the Audit Committee of the Board Of Directors
The information contained in this report shall not be deemed to be
"soliciting material" or to be "filed" with the SEC, nor shall such information
or report be deemed incorporated by reference into any future filing by the
Company under the Securities Act of 1933, as amended, or the Exchange Act,
except to the extent that the Company specifically incorporates it by reference
in such filing.
The Audit Committee of the Board of Directors of the Company is composed of
three Independent Directors (Leo Fields, Chairman, Claude M. Ballard and William
J. Poorvu) and operates under a written charter adopted by the Board of
Directors on June 9, 2000 (see Exhibit "A").
Management is responsible for the Company's internal controls and financial
reporting process. The Company's independent accountants are responsible for
performing an independent audit of the Company's financial statements in
accordance with auditing standards generally accepted in the United States and
to issue a report thereon. The Audit Committee's responsibility is to monitor
and oversee these processes.
In this context, the Audit Committee has met and held discussions with
Management and the Company's independent accountants. Management reported to the
Audit Committee that the Company's consolidated financial statements for the
Company's 2000 fiscal year were prepared in accordance with accounting
principles generally accepted in the United States, and the Audit Committee has
reviewed and discussed these consolidated financial statements with Management
and the Company's independent accountants. The Audit Committee discussed with
the independent accountants the matters required to be discussed by Statement on
Auditing Standards No. 61 (Communications with Audit Committee), as amended.
The Company's independent accountants also provided to the Audit Committee
the written disclosures and the letter required by Independence Standards No. 1
(Independence Discussions with Audit Committees) and the Audit Committee
discussed with the independent accountants their firm's independence. The Audit
Committee considered whether the provision of services by the independent
accountants (other than audit services) is compatible with maintaining the
independent accountants' independence.
Based on the Audit Committee's review and discussions referred to above,
the Audit Committee recommended that the Board of Directors include the
Company's audited consolidated financial statements in the Company's Annual
Report on Form 10-K for the year ended December 31, 2000 filed with the
Securities and Exchange Commission.
AUDIT COMMITTEE
Leo Fields (Chairman)
Claude M. Ballard
William J. Poorvu
17
Performance Graph
The graph set forth below compares the percentage change in the cumulative
stockholder return on the Common Stock with the cumulative total return of the
Standard & Poor's 500 Total Return Index ("S&P 500") and The National
Association of Real Estate Investment Trusts' ("NAREIT") Equity REIT Total
Return Index1 for the period commencing December 31, 1995 through December 31,
2000. The following graph assumes that the value of the investment in the
Company and the indices was $100 at the beginning of the period and that
dividends were reinvested. The stock price performance presented below is not
necessarily indicative of future results:
GRAPH OF THE PERFORMANCE OF THE COMPANY'S STOCK RELATIVE TO
OTHER INDEXES APPEARS HERE.
Period Ending
Index 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
CBL & Associates Properties, Inc. 100.00 128.12 131.20 147.59 128.31 171.43
S & P 500 100.00 122.86 163.86 210.64 254.97 231.74
NAREIT Equity REIT Index(1) 100.00 135.27 162.67 134.20 128.00 161.76
1 The NAREIT Equity REIT Total Return Index is published monthly, based
on the last closing prices of the preceding month.
18
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Management Agreement
The Company is party to a management agreement with the Management Company
pursuant to which the Management Company renders management and administrative
services with respect to the Company's properties. The Company, through the
Operating Partnership, owns 100% of the preferred stock and 5% of the common
stock of the Management Company and Charles B. Lebovitz, his family and certain
of the Associates own 95% of the common stock of the Management Company. Through
the ownership of 100% of the preferred stock of the Management Company, the
Company enjoys substantially all of the economic benefits of the Management
Company's business. The Management Company also provides management services for
certain properties owned by CBL and certain other third parties for which the
Management Company is paid a management fee. See "Retained Property Interests."
Partnership Agreement; CBL Rights
The Company entered into the Operating Partnership Agreement with CBL. The
Company, through subsidiaries, serves as the sole general partner of the
Operating Partnership and owns, as of March 6, 2001, 25,247,198 common
partnership units, representing an aggregate 51.1% interest in the Operating
Partnership. CBL owns 7,335,189 common partnership units, representing a 14.8%
limited partner interest in the Operating Partnership. Certain executive and
senior officers also own common partnership units.
Pursuant to the Operating Partnership Agreement, the limited partners were
granted CBL Rights, consisting of the rights to exchange all or a portion of
their common partnership units in the Operating Partnership for shares of Common
Stock or their cash equivalent, at the Company's election. The CBL Rights may be
exercised at any time and from time to time to the extent that, upon exercise of
the CBL Rights, the exercising party shall not beneficially or constructively
own shares of Common Stock in excess of the applicable ownership limit. The
Company, however, may not pay in shares of Common Stock to the extent that this
would result in a limited partner beneficially or constructively owning in the
aggregate more than its applicable Ownership Limit or otherwise jeopardize, in
the opinion of counsel to the Company, the Company's qualification as a real
estate investment trust for tax purposes.
The number of shares of Common Stock and/or cash received by the limited
partners of the Operating Partnership upon exercise of CBL Rights will be based
upon the equivalent number of partnership units owned by the limited partners on
a one-for-one basis and the amount of cash received by the limited partners upon
such exercise, if the Company elects to pay cash, will be based upon the trading
price of the shares of Common Stock at the time of exercise.
CBL Rights will expire in November 2043 if not exercised prior to that
date.
Jacobs Acquisition
On January 31, 2001, the Company acquired from Jacobs Realty Investors
Limited Partnership and certain of its affiliates and partners a portfolio of 21
malls and 2 associated centers for an aggregate consideration of approximately
$1.3 billion, and, in a separate transaction, the Company acquired the remaining
50% interest in Madison Square Mall in Huntsville, Alabama. In connection with
these transactions, the Operating Partnership issued 12,659,677 special common
units of the Operating Partnership (SCUs), representing in the aggregate a
25.48% limited partner interest in the Operating Partnership. Each SCU is
initially entitled to receive a quarterly distribution of $0.725625 (equivalent
to an annual distribution of $2.9025). SCUs may, at any time after the earlier
of (i) the third anniversary of their issuance, or (ii) the death of the
beneficial owner of the SCUs, be exchanged for cash, shares of the Company's
Common Stock (on a one-for-one basis) or any combination of cash or shares of
Common Stock, at the Company's election. Following the tenth anniversary of
their issuance, the Company will have the right to convert the SCUs into common
partnership units of the Operating Partnership.
19
In connection with the Jacobs Acquisition, the Company agreed to expand its
Board of Directors from seven to nine members and to nominate two of Jacobs'
designees as members of the Board. Martin J. Cleary and Gary L. Bryenton were
appointed the Board as Jacobs' initial designees. Jacobs will continue to be
entitled to nominate two Board members until the Jacobs family beneficially owns
fewer than 6.78 million SCUs and shares of Common Stock, following which Jacobs
will be entitled to nominate only one Board member. Jacobs will no longer be
entitled to nominate any Board members if the Jacobs family beneficially owns
fewer than 3.34 million SCUs and shares of Common Stock. CBL and certain of the
Company's executive officers have agreed to vote their shares in favor of
Jacobs' designees until the twelfth anniversary of the Jacobs Acquisition.
Jacobs and certain affiliated entities and persons have agreed to a 12-year
standstill period during which they will not seek to acquire control of the
Company and will not to participate in a group which seeks to acquire such
control. Jacobs also agreed until the twelfth anniversary of the Jacobs
Acquisition to vote its shares in favor of the election of the Board's nominees
to the Board of Directors who are running unopposed and uncontested.
Subject to certain exceptions, Richard E. Jacobs has agreed not to acquire,
develop, manage, own, lease or invest in regional mall shopping centers within
15 miles of certain properties acquired from Jacobs or within 12 miles of any
other of the Company's existing malls or malls acquired from Jacobs.
In connection with the Jacobs Acquisition, the Company agreed to seek
stockholder approval of an amendment to its certificate of incorporation which,
among other things, permits the Lebovitz Group (as defined in the Company's
certificate of incorporation) and the Jacobs Group (as defined in the amendment)
to beneficially and constructively own in the aggregate 37.99% of the Company's
equity stock. The Company's stockholders approved of this amendment at a special
meeting of stockholders held on January 19, 2001.
Retained Property Interests
CBL owns interests in outparcels at certain of the Company's malls and a
minority interest in one mall, the majority interest in which is owned by a
third party. Certain members of Charles B. Lebovitz's family and his father's
estate continue to own four community and neighborhood centers and two tracts of
vacant land. The properties retained by CBL and the properties owned by the
Lebovitz family are managed and leased by the Management Company which receives
a fee for its services. During fiscal year 2000, CBL and the Lebovitz family
paid the Management Company approximately $84,000 under such arrangement.
Affiliated Entities
Certain executive officers of CBL collectively have a non-controlling
interest in a major national construction company that built substantially all
of the properties developed by the Company and is currently building the
Company's construction properties. Charles B. Lebovitz is also a director of the
construction company. The majority interest in the construction company is held
by the members of its senior management, none of whom are affiliated with CBL or
the Company. As of December 31, 2000, the Company had 19 active contracts
(including contracts in respect of each of the construction properties) with
such construction company having aggregate value of approximately $88 million.
During fiscal year 2000, the Company paid approximately $123 million to this
construction company.
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The construction company and CBL own all of the interests of a partnership
that owns two aircraft and a fractional interest in another aircraft used by the
personnel of the Company and the construction company. Each partner contributes
equally to fixed costs and shares variable costs through an hourly charge based
on usage. The Company reimburses the partnership for costs on an hourly basis
associated with use of the aircraft relating to the business of the Company.
During fiscal year 2000, the Company paid approximately $1 million as
reimbursement for operating expenses pursuant to such arrangement.
The Bylaws provide that any contract or transaction between the Company or
the Operating Partnership and one or more directors or officers of the Company
or between the Company or the Operating Partnership and any other entity in
which one or more of its directors or officers are directors or officers, or
have a financial interest, must be approved by disinterested directors or
stockholders after the material facts as to the relationship or interest and as
to the contract or transaction are disclosed or are known to them.
Certain Leases
Certain executive officers and certain Company employees are partners in
partnerships that lease 22 spaces representing approximately 43,000 square feet
in 12 of the Company's malls as tenants. Such spaces are operated as food
service and entertainment establishments. Management believes that, at the time
these leases were entered into, they provided for rental payments at market
rates and terms.
Shumacker & Thompson, P.C., local counsel to the Company and CBL, leases
2,536 square feet of office space at the Company's office building. The
construction company also leases 10,054 square feet of office space at the
Company's office building. Management believes that, at the time these leases
were entered into, they provided for rental payments at market rates and terms.
Other
Charles B. Lebovitz, certain members of his family, certain of the
Associates, a partnership consisting of certain of the Associates, and Eric P.
Snyder have personally guaranteed an aggregate of $12.99 million of the debt of
the Operating Partnership. Such guarantee is payable only if, and to the extent
that, proceeds from a foreclosure sale of all assets of the Operating
Partnership are not in excess of the guarantee.
Charles B. Lebovitz is currently an advisory director of First Tennessee
Bank, N.A., Chattanooga, Tennessee ("First Tennessee"). The Company is currently
maintaining an $80 million line of credit from First Tennessee that matures in
2002. There was approximately $24.9 million outstanding on this line of credit
at December 31, 2000. In the future, the Company or the Operating Partnership
may, in the ordinary course of business, engage in other transactions with First
Tennessee on competitive terms.
John N. Foy is currently an advisory director of AmSouth Bank of Tennessee
("AmSouth"). The Company is currently maintaining a $5 million line of credit
from AmSouth that matures in 2002. There was approximately $1.2 million
outstanding on this line of credit at December 31, 2000. In addition, AmSouth is
a participant in the First Tennessee line of credit referred to in the
immediately preceding paragraph and is the lender on a certain loan involving
the Company's project named Sand Lake Corners in Orlando, Florida which loan, at
December 31, 2000, had approximately $14.0 million outstanding. In the future,
the Company or the Operating Partnership may, in the ordinary course of
business, engage in other transactions with AmSouth on competitive terms.
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RATIFICATION OF THE SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors proposes and recommends that the stockholders ratify
the selection of the firm of Arthur Andersen LLP to serve as independent public
accountants of the Company for the year ending December 31, 2001. Arthur
Andersen LLP served as the Company's independent public accountants from the
Company's inception in July 1993 to the present. Unless otherwise directed by
the stockholders, proxies will be voted for approval of the selection of Arthur
Andersen LLP to audit the Company's consolidated financial statements for the
2001 fiscal year. A representative of Arthur Andersen LLP will attend the Annual
Meeting, and will have an opportunity to make a statement and to respond to
appropriate questions.
Audit Fees
Audit Fees billed by Arthur Andersen LLP during the Company's 2000 fiscal
year for the audit of the Company's annual financial statements and the reviews
of the financial statements included in the Company's quarterly reports on Form
10-Q totaled $166,500.
Financial Information Systems Design and Implementation Fees
The Company did not engage Arthur Andersen LLP to provide advice to the
Company regarding financial information systems design and implementation during
the Company's 2000 fiscal year.
All Other Fees
The aggregate fees billed by Arthur Andersen LLP during the Company's 2000
fiscal year for other services rendered to the Company totaled $892,260.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" THE RATIFICATION OF THE SELECTION OF
ARTHUR ANDERSEN LLP AS THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR 2001
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DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
In accordance with the rules established by the SEC, stockholder proposals
to be included in the Company's proxy statement with respect to the 2001 Annual
Meeting of Stockholders must be received by the Company at its executive offices
located at 6148 Lee Highway, Suite 300, Chattanooga, Tennessee 37421 no later
than November 25, 2001.
In addition, the Company's Bylaws provide that any stockholder of record
desiring to nominate a director or have a stockholder proposal considered at an
annual meeting must provide written notice of such nomination or proposal and
appropriate supporting documentation, as set forth in the Bylaws, to the Company
at its principal executive offices not less than 60 days nor more than 90 days
prior to the anniversary date of the prior year's annual meeting (the
"Anniversary Date"); provided, however, that stockholders will have additional
time to deliver the required notice in the event the annual meeting is advanced
by more than 30 days or delayed by more than 60 days from the Anniversary Date.
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OTHER BUSINESS OF THE MEETING
Management is not aware of any matters to come before the Annual Meeting
other than those stated in this Proxy Statement. However, inasmuch as matters of
which the management is not now aware may come before the meeting or any
adjournment, the proxies confer discretionary authority with respect to acting
thereon, and the persons named in such proxies intend to vote, act and consent
in accordance with their best judgment with respect thereto. Upon receipt of
such proxies (in the form enclosed and properly signed) in time for voting, the
shares represented thereby will be voted as indicated thereon and in this Proxy
Statement.
By Order of the Board of Directors
STEPHEN D. LEBOVITZ
Secretary
Chattanooga, Tennessee
March 29, 2001
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 2000 MAY BE OBTAINED WITHOUT CHARGE BY ANY STOCKHOLDER TO WHOM THIS
PROXY STATEMENT IS SENT, UPON WRITTEN REQUEST TO INVESTOR RELATIONS, CBL &
ASSOCIATES PROPERTIES, INC., 6148 LEE HIGHWAY, SUITE 300, CHATTANOOGA, TENNESSEE
37421-6511.
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EXHIBIT A
CHARTER OF
THE AUDIT COMMITTEE
OF
CBL & ASSOCIATES PROPERTIES, INC.
I. SCOPE, PURPOSE AND STATEMENT OF POLICY
There shall be a Committee of the Board known as the "Audit Committee". The
Audit Committee shall provide assistance to the Board in fulfilling the Board's
responsibilities relating to (i) the Company's accounting and procedures; (ii)
the Company's financial reporting and disclosure practices; and (iii) the
quality and integrity of the Company's financial reports. The Audit Committee
shall endeavor to maintain free and open communication between the Board, the
Company's independent accountants/auditors and the Company's accounting and
financial personnel. The Audit Committee shall have a clear understanding with
the Company's independent accountants/auditors that the Company's independent
accountants/auditors are ultimately accountable to the Board and to the Audit
Committee.
II. STRUCTURE
The Audit Committee shall be comprised of not less than three (3) members
of the Board as determined by the Board. Each director appointed to the Audit
Committee shall be independent and free of any relationship that, in the Board's
opinion, would interfere with such director's exercise of independent judgment
as a member of the Audit Committee. All members of the Audit Committee shall be
financially literate and at least one (1) member of the Audit Committee shall
have accounting or related financial management expertise. The Audit Committee
shall be appointed by the Board on an annual basis and each member of the Audit
Committee shall serve until his/her successor shall have been duly elected and
qualified.
III. RESPONSIBILITIES
The Audit Committee's policies and procedures should remain flexible in
order to best react to changing conditions. The Audit Committee shall:
1. Require and review, on at least an annual basis or more often if the
circumstances so require, a written statement from the Company's independent
accountants/auditors regarding the relationships and services which may impact
the independence of the Company's independent accountants/auditors, review and
discuss such relationships and services with the Company's independent
accountants/auditors;
2. Meet with the Company's independent accountants/auditors and the
Company's financial and accounting personnel to review and discuss the matters
required to be discussed with the Company's independent accountants/auditors
under Statement on Auditing Standards (SAS) No. 61 as may be amended or
modified;
3. Review and discuss with the Company's management the Company's audited
financial statements to be included in the Company's Annual Report on Form 10-K
and determine, on an annual basis, whether to recommend to the Board the
inclusion of the Company's audited financial statements in the Company's Annual
Report on Form 10-K; and
EXHIBIT A (continued)
4. Prepare a written report of the Audit Committee for inclusion in the
Company's annual proxy statement issued in conjunction with the Company's annual
shareholders' meeting containing the items required by applicable rules of the
SEC and NYSE.
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IV. ADDITIONAL FUNCTIONS
In addition to the responsibilities set forth above, the Audit Committee
shall:
(i) Review and recommend to the Board the selection, evaluation
and, where appropriate, the replacement of the Company's
independent accountants/auditors or the nomination of
independent accountants/auditors to be proposed for approval
by the Company's shareholders pursuant to any proxy statement;
(ii) If appropriate, recommend to the Company's Board appropriate
action in response to the independent accountants/auditors'
written statement referred to in Article III(i) above to
satisfy the Company's Board as to the independence of the
Company's independent accountants/auditors;
(iii) Meet at least two (2) times per fiscal year of the
Company, or more often if the circumstances so
require, and such meetings may be held in person or
via telephonic link;
(iv) Meet with the Company's independent
accountants/auditors and the Company's financial and
accounting personnel to review and discuss (A) the
scope of the Company's annual audit to be performed
by the independent accountants/auditors and audit
procedures to be utilized in such annual audit; (B)
the Company's internal audit function; and (C) the
scope and adequacy of the Company's accounting and
financial controls;
(v) Provide sufficient opportunity for the Company's independent
accountants/auditors and/or the Company's accounting and
financial personnel to meet with the Audit Committee without
the Company's management being present;
(vi) Review any matter brought to the attention of the Audit
Committee within the scope of its duties and purpose and, if
deemed advisable by the Audit Committee, investigate such
matters and, if necessary, retain independent professional
advice on any such matters;
(vii) Review the Charter of the Audit Committee on an
annual basis and recommend to the Board any
revisions, amendments or modifications thereto that
the Audit Committee deems necessary or appropriate;
and
(viii) Do such other things as may be required of audit committees by
the SEC and/or the NYSE.
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